Setting Up A Private Practice in Physiotherapy and it’s Advantages
SETTING UP A NEW PRACTICE FOR PHYSIOTHERAPY.
When setting up a private practice it is essential to consider the type of ownership structure. A practice can be owned by a sole proprietor, by a partnership of two or more, or by Directors of a Limited Company. Each scenario has different tax and legal implications, and these should be given due consideration.
A. Business Planning
When seeking to start a private physiotherapy business it is important to seek advice, develop a thorough business plan and evaluate the risk. In addition to establishing whether starting a business is viable, a business plan should address the following issues:
1: How strong is the competition?
2: How much can you charge?
3: Who will buy your service?
4: How can you market the business?
5: How do you evaluate the service and provide evidence of good practice?
6: What are the costs involved (i.e. both initial and operating costs)?
7: Who would provide the facilities and equipment?
8: What would happen in the event of illness?
B. Start Up Capital
When making the decision to set up a private practice the individual will be required to come up with a varying amount of capital in order to cover start up costs
Sources of this capital will include
1: Government Grants
2: Small Business Loans
3: Private Investors
4: Personal Funding
Firstly, you need to identify the area in which to establish the practice. Close proximity to general practitioners, gymnasiums and heath/leisure centres can help you build local networks that could benefit your practice. It may help to rent space within a health centre or gymnasium, not only to decrease overheads, but to establish referral networks. The location that you choose may have an important impact on the type of clinic you have. Whether it is in the premium or economy class will have an impact on rent, which will ultimately influence the prices charged for physiotherapy services. Therefore think very carefully about the area, as most leases are from 1 to 3 years.
How much space do you need?
Before you search for your premises, write a list of exactly what you require, remember, as space increases costs increase, so consider the followig very carefully:
1: How many rooms do you need?
2: How big do the clinical areas need to be?
3: How much storage space is required?
4: Are the premises suitable for disabled access?
5: Do you want to do your administration in the clinic or are you happy to do this at home?
6: Do you need a staff room?
Things to consider when viewing a premises
1: Can you afford the rent/mortgage? It does not matter that the property is perfect, if it costs too much, your fixed costs will increase and this could undermine the financial viability of the business.
2: How much is the business rate for the premises?
3: When can you move in?
4: How long is the minimal rent period?
5: How often is rent reviewed and is there a formula for doing this?
6: Is the rent all-inclusive or are there any extra service charges?
7: How much notice is required if moving out?
8: Who is responsible for maintenance of the building, and who is responsible for building insurance?
9: Are there any restrictions on the use of the property in the lease or rental agreement?
10: Is planning permission required either to change the use of the building or effect structural changes to the building?
11: Will there be room for clients to park?
12: How good is the street/car park lighting?
13: Have the premises/neighbouring premises ever been broken into?
14: Disabled Access The disability Discrimination act 1995 makes it unlawful for service providers to discriminate against disabled people and requires service providers to make “reasonable adjustments” in relation to the physical features of their premises to overcome physical barriers to access.
D. Equipment and Stationary
Equipment will vary depending on the manufacturers, suppliers and types of equipment you require.
Leasing of equipment is an additional option. Advertisements for second-hand equipment appear often appear in physiotherapy or related magazines. Appointment and treatment cards, headed notepaper, brochures and patients’ accounts stationery will be needed and should appear professionally.
When considering equipment you need to ask a number of questions:
1: Can the equipment inform and direct your assessment, or allow you to undetake certain treatments that you otherwise could not do?
2: How many times will you use it?
3: Can it generate sufficient funds to recover the initial capital spent on purchasing it?
4: In the eyes of the patient will using a particular piece of equipment improve their perception of the service sufficiently for you to command a higher fee?
5: You also need to consider whether is is necessary to purchase the equipment or can you lease it?
E. There are different ways to start your practice.
In a partnership, two or more people share the risks, costs and responsibilities of being in business. This is a simple, flexible and cost effective method to run a private practice. Conversely, partners do not have any protection if the business is not a success. Each partner is self-employed and the profits are shared accordingly. A partnership has no legal existence separate from the partners themselves.
A sole trader runs their business as an individual. Responsibility of all aspects of the business falls back on the owner, including paying personal tax on the profits of the business. A sole trader is personally liable for any debts that the business acquires and is therefore a risky option for businesses with a lot of investment. The advantages are independence and any profits made go to you. Some disadvantages include a lack of support, unlimited liability, and personal responsibility for any business debts.
A limited company exists in its own right and remains a separate entity from its owners. Shareholders can be individuals or other companies. The shareholders are not responsible for the company’s debts unless they have given guarantees. This is a distinct advantage of this management structure. The only money that can be lost is the money invested in the company.
Advantages of Private Practice
- A more personalised experience of treatment.
- Reduced waiting times
- Possibility of longer treatment sessions
- A wider variety of treatment options
- Increased patient autonomy
Excitement and personal challenge
The start up period will involve discovering new talents and creativity.
By writing your own business plan, renting space and equipment and executing your marketing strategy, you add a personal touch to your practice.
- Independence and Autonomy
Being your own boss -deciding when you want to work, how you work,and the clients you choose to work with.
Direct Link Between Effort and Reward
Your compensation will be a result of the work you put in i.e. the harder you work to gain referrals, the more income you will earn.
The extra knowledge and skills required to specialise in an area which other practices cannot or choose not to, will again be rewarded with extra business and income.
- Flexible Work Schedule
Once your practice is established you can choose to work outside the traditional ‘8.30-1630’ hospital hours-improving your work-life balance
Holidays can be taken at times that suit you, and compulsory working days e.g. during the Christmas period will be free to be days off.
- Earning What You Deserve
You decide your own fee structure and therefore what you get paid-the earning potential is unlimited.
You have the authority to budget any improvements ie. marketing, equipment etc.
You are not subjected to workplace politics or hospital heirarchy